(Reuters) - Interest rates should not be decided robotically or on autopilot because the data available about the economy is far too imprecise, a U.S. Federal Reserve policymaker said on Monday.
"To operate monetary policy mechanically, we’d need a level of accuracy that just isn’t possible," Federal Reserve Bank of Philadelphia President Patrick Harker said in remarks prepared for delivery in Boston. "We’d need a lot more data, a lot more frequently, with a lot more precision than the laws of economics allow."
Harker told reporters last week that he sees "at most" one rate hike this year but that he is in no rush to raise rates and that he is worried about low inflation expectations.
Without the benefit of policymakers' judgment, Harker said, central banks might have raised rates in the aftermath of the 2007-2009 global financial crisis, hobbling the economy.
Harker, who does not vote on the rate-setting Federal Open Market Committee this year but participates in its deliberations, described the labor market as "increasingly tight."